Money Talks News: How to shop for a mortgage

If you have ever applied for a mortgage, you know it is not fun, but is important.

While many home shoppers may not realize it, buying a home is really two separate transactions: The first is finding financing. The second is finding the right house.

Navigating the mortgage maze can be confusing. But if you follow the golden rules, it is a lot easier.

Golden rule number one? Check your credit long before you need that loan, at least six months before, preferably a year. Then ask a potential lender, like a mortgage broker, exactly what you need to do to get the highest score. They can help you.

"We literally are told by the credit companies we pull from what the potential rise in their score could be and what actions they have to take to get it there, and we coach them to do that," Mortgage Broker Tina Mulligan said.

Golden rule number two? First the mortgage, then the house.

House shopping without a mortgage is like going to the mall without your wallet: You need to know what you have to spend.

Which leads us to Golden Rule number three: Get pre-approved, not just pre-qualified.

"Pre-approval means the lender or the bank has already seen your income and your assets and your credit and has already approved you for financing up to a certain amount of money," Mulligan said.

Then there is golden rule number four: Shop it hard. The Internet makes it easy, and pitting lenders against each other is the shortest path to the best deal.

And a final golden rule: take out the garbage. Mortgages are often loaded with garbage fees. Ask every lender about every fee, then negotiate away those you can. Again, pit those lenders against each other.

Finding the right mortgage could mean thousands in your pocket. Take your time and do it right.

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